Disposable income equals aggregate income plus transfers minus taxes.

Question

Quizplus · Accepted Answer

Disposable income is the income that households have available for spending after taxes and other deductions have been made. Aggregate income is the total income earned by all households in an economy. Transfers are payments made by the government to individuals or households, such as social security benefits or welfare payments. Taxes are payments made by individuals or households to the government, such as income taxes or sales taxes. Therefore, disposable income equals aggregate income plus transfers minus taxes.

Disposable Income Equals Aggregate Income Plus Transfers Minus Taxes